Built to Sell by John Warrillow

Last updated: Jul 9, 2023

Summary of Built to Sell by John Warrillow

Built to Sell by John Warrillow is a comprehensive guide that provides valuable insights and practical advice on how to transform a service-based business into a sellable asset. The book follows the story of Alex Stapleton, the owner of a marketing agency, as he embarks on a journey to make his business more attractive to potential buyers. The book begins by highlighting the common mistakes entrepreneurs make when trying to sell their businesses. Warrillow emphasizes the importance of creating a business that can thrive without its owner's constant involvement. He introduces the concept of the "Swiss Army Knife" business, which is a company that offers a wide range of services but lacks a clear focus. Warrillow argues that such businesses are difficult to sell because they are too dependent on the owner's expertise. To address this issue, Warrillow introduces the concept of specializing in a single product or service. He explains that by narrowing down the focus, business owners can create a unique selling proposition and differentiate themselves from competitors. This specialization allows for scalability and the potential to build a valuable brand. Warrillow then introduces the concept of creating a standardized process for delivering the specialized service. By systematizing the business operations, owners can reduce their involvement and create a more efficient and scalable business model. This also increases the attractiveness of the business to potential buyers, as they can easily understand and replicate the processes. The author also emphasizes the importance of building a strong management team. He advises business owners to delegate responsibilities and empower their employees to take ownership of their roles. This not only reduces the owner's workload but also demonstrates to potential buyers that the business can run smoothly without their constant presence. Warrillow also discusses the significance of recurring revenue in building a sellable business. He encourages entrepreneurs to shift their focus from one-time projects to long-term contracts or subscription-based models. This provides stability and predictability, making the business more attractive to buyers who are looking for a reliable income stream. Throughout the book, Warrillow provides practical tips and real-life examples to illustrate his points. He also includes a variety of exercises and checklists to help readers apply the concepts to their own businesses. The book concludes with a step-by-step guide on how to prepare a business for sale, including finding the right buyer and negotiating a fair price. In summary, Built to Sell is a comprehensive guide that offers valuable insights and practical advice on how to transform a service-based business into a sellable asset. By specializing in a single product or service, creating standardized processes, building a strong management team, and focusing on recurring revenue, entrepreneurs can increase the value of their businesses and attract potential buyers.

1. Focus on a Niche Market

One of the key takeaways from "Built to Sell" is the importance of focusing on a niche market. Warrillow emphasizes that trying to be everything to everyone can dilute your business and make it less attractive to potential buyers. By narrowing your focus and becoming an expert in a specific niche, you can differentiate yourself from competitors and create a more valuable and sellable business.

For example, if you run a marketing agency, instead of offering a wide range of services to various industries, you could specialize in providing digital marketing solutions specifically for e-commerce businesses. This specialization allows you to develop deep expertise, build a strong reputation, and attract clients who are specifically looking for your unique offering. When it comes time to sell your business, potential buyers will see the value in your niche expertise and be more willing to pay a premium for it.

2. Create a Scalable Business Model

Another important takeaway from the book is the need to create a scalable business model. Warrillow explains that a scalable business is one that can grow rapidly without requiring a proportional increase in resources or costs. This scalability is attractive to potential buyers because it means they can continue to grow the business without significant additional investment.

To create a scalable business model, you need to identify ways to leverage technology, automation, and processes to increase efficiency and reduce reliance on manual labor. This could involve developing software solutions, implementing standardized systems and procedures, or outsourcing non-core functions. By focusing on scalability, you not only make your business more valuable to potential buyers but also position it for sustainable growth and success in the long term.

3. Build a Strong Management Team

Building a strong management team is another key takeaway from "Built to Sell." Warrillow emphasizes the importance of having a team of capable leaders who can run the business effectively without the owner's constant involvement. This not only reduces the owner's workload but also makes the business more attractive to potential buyers.

To build a strong management team, you need to identify and develop talented individuals who can take on key roles and responsibilities. This may involve hiring new employees, promoting from within, or providing training and development opportunities. By empowering your management team and giving them the autonomy to make decisions, you create a business that can operate independently of the owner, increasing its value and appeal to buyers.

4. Develop a Unique Selling Proposition

Having a unique selling proposition (USP) is crucial for standing out in a crowded market, and this is another takeaway from the book. Warrillow explains that a USP is a clear and compelling statement that communicates the unique value your business offers to customers.

To develop a strong USP, you need to identify what sets your business apart from competitors and articulate it in a way that resonates with your target audience. This could be based on factors such as superior quality, exceptional customer service, innovative technology, or specialized expertise. By clearly defining and promoting your USP, you differentiate your business and make it more attractive to potential buyers who are looking for something unique and valuable.

5. Create Systems and Processes

Creating systems and processes is another important takeaway from "Built to Sell." Warrillow explains that having well-documented and standardized systems in place not only increases efficiency and productivity but also makes your business more attractive to potential buyers.

By creating systems and processes, you ensure that tasks and responsibilities are clearly defined, and that there is consistency and reliability in how things are done. This reduces the reliance on individual employees and makes it easier for new owners to step in and run the business smoothly. Additionally, having documented systems and processes demonstrates that your business is well-organized and can operate effectively without the owner's constant involvement, increasing its value and appeal to buyers.

6. Diversify Your Customer Base

Another takeaway from the book is the importance of diversifying your customer base. Warrillow explains that relying too heavily on a small number of customers can make your business vulnerable and less attractive to potential buyers.

To diversify your customer base, you need to actively seek out new customers and industries, and develop strategies to attract and retain them. This could involve expanding your marketing efforts, targeting new market segments, or developing new products or services to appeal to a wider audience. By diversifying your customer base, you reduce the risk of losing a significant portion of your revenue if a key customer leaves, and make your business more stable and valuable to potential buyers.

7. Focus on Recurring Revenue

Building a business with a strong focus on recurring revenue is another key takeaway from "Built to Sell." Warrillow explains that having a predictable and consistent stream of revenue from recurring sources, such as subscriptions or service contracts, makes your business more valuable and attractive to potential buyers.

To focus on recurring revenue, you need to identify opportunities to offer ongoing products or services that customers will continue to pay for over time. This could involve implementing subscription models, offering maintenance or support contracts, or developing long-term partnerships with clients. By prioritizing recurring revenue, you create a more stable and sustainable business model that is less reliant on one-time sales, increasing its value and appeal to buyers.

8. Plan for Your Exit

The final takeaway from the book is the importance of planning for your exit from the beginning. Warrillow emphasizes that building a business with the intention of selling it requires careful planning and preparation.

To plan for your exit, you need to set clear goals and timelines, develop a strategy for maximizing the value of your business, and ensure that you have the necessary documentation and financial records in place. This may involve working with advisors, such as accountants or business brokers, who can provide guidance and support throughout the process. By planning for your exit from the beginning, you position your business for a successful sale and ensure that you can achieve the maximum value for your hard work and investment.